> spending money outside of the tax jurisdiction away from the knowledge of the tax jurisdiction is a loophole.
Yeah, but how? How do you carry it or send it across the border? Cash? Gold? Good luck with that. You'd basically have to set up a smuggling operation for cash like people now do for drugs. With the risk of cash going missing and every step of the road. Becasue it's not hot and whoever steals it can use it as they please immediately.
> Expecting the wealthy are going to report their sales taxes on goods purchased overseas is as hopeful as back in the day states hoping people would report their online purchases.
I'm not expecting anyone to report that they bought something abroad. I expect their bank to to report they made a transfer abroad and deduct spending tax automatically.
> So those who make money on exports pay even lower tax rates than those working domestically, by design?
Yes, because exports are desirable for building wealth of a country. There's a single country on Earth that benefits from exporting not goods or services but dollars. That's because they are printing them for free and the world for one reason or another wants them. Any other country benefits from exports and it's an activity every government tries hard to promote to get purchasing power in the global economy for the stuff the country can't make themselves.
> And who in that "business of exports" actually gets that benefit?
That's the question. In case of VAT burden is transferred along the chain. In spending tax, tax credit could be similarily propagated. Everyone could have tax credit on their sales and tax to pay on their purchases. This already works for companies for purposes of VAT. All transactions between companies are tracked so purchases could be taxed and sellers can be taxcredited (the opposite of VAT). In case of individual people, they make many transactions that are not specifically linked to them (and we want to keep it that way for privacy). Their spending tax can be collected and paid by the companies that sell stuff directly to consumers. The tax credit for individuals could take a form of direct cash transfer from the governement budget to supplement their salary. There's of course incentive for this companies to not report their sales to customers and not pass the tax paid them by the consumers to the country budget. But that's the same thing as we have now that companies have incentive to hide sales income to not pay income tax on it so exisitng solutions to combat that should perform no worse than they do now (mystery customers, recipt lottery, comparing income+financing with spending).
Tax credit wouldn't be 100% of sales (because companies on average earn more than spend so they would never pay tax while operating normally) and transfers to individuals could be shaped freely. They could be associated with their salaries or not or a mixture of two. This way governement could very effectively promote specific economic activities with tax credits to companies and keep the poorest out of poverty with direct money transfers but also promote job seeking and career advancement by paying some addtional money to workers, less as their salary level approaches societally desired "middle class".
I don't have all the kinks ironed out. It's just an idea that I had about a month ago. I haven't written my own tax code. Yet. ;-)
> They'll get a tax break on their expensive foreign vacation while us plebs here pay full tax rates.
Well, if somebody operates a successful company, especially an exporter they should be rewarded. But the reward should be transparent and controlled and not up to their weaseling, tax dodging tax and fabricalting fictional losses. As you know they are already getting the handouts. If the system is tight and clean we can decide how much of a reward they actually deserve through a political process. I am aware that our political system is terrible for that, but it's terrible for what we have now too so that's beside the point.
The point of my idea is mostly to introduce transparency and control and vastly simplify and integrate the myriad of tax systems we use in parallel in one country. Income taxes, VAT, duty, social security, health premiums, captial gains tax, fuel tax, excise. All of that could be replaced with one framework of taxes on spending. This would also be good for migrating to economy that's not reliant on infinite growth because doing more with less would be promoted by the tax structure. You are taxed on what you use, you are 100% taxed on what you waste or consume.
> Having poorer people pay more effective tax rates than wealthier people doesn't strike me as fair.
That's not at all what I'm advocating for. Poor people mostly don't matter from tax perspective. If tax credit for them is set up in a way that they pay effectively very little or zero tax or even get money for nothing it wouldn't matter for the govermenet budget and there would be strong, popular opposition to lowering their tax credit as that would be direct hard cash on their accounts recieved every month. In modern system it's vastly easier to give tax cuts for the rich than for the poor and nearly impossible to give anything to the totally destitute.